PotashCorp said July 17 that it plans to add 2.7 million mt of potash capacity at three of its Saskatchewan facilities. This capacity will be achieved through a new debottlenecking project at Allan and increases in the scope of projects announced in 2007 for Cory and Rocanville. Work on all three projects will be initiated immediately. These projects carry a combined cost of US$1.6 billion, and will raise PotashCorp’s operational capacity to 18 million mt by the end of 2012. The cost is approximately 60 percent less than that estimated for comparable greenfield capacity, and the projects will make the additional production available much more quickly than a new mine could be developed.
The Allan debottlenecking will add 1 million mt of annual production capability and raise its annual capacity to 3 million mt per year. Construction and ramp-up are scheduled for completion by the end of 2012. This project, which follows a 400,000-mt expansion completed in 2007, has an estimated cost of US$350 million. At Cory, the new project will add 1 million mt to a 1.2-million-mt-per-year debottlenecking and expansion project initiated in 2007. The initial project is scheduled for completion in 2010, with construction and ramp-up of the new project completed by the end of 2012. The additional work has an estimated cost of US$220 million and will raise the facility’s annual capacity to 3 million mt.
At Rocanville, an additional 700,000 mt of capacity will be incorporated into the 2-million-mt mine-and-mill project announced in 2007. With an additional investment of US$1.0 billion, the project is now expected to add a total of 2.7 million mt at a cost of US$2.8 billion, and raise the facility’s annual capacity to 5.7 million mt. Construction is scheduled for completion at the end of 2012, with ramp-up over the following two years.
These projects represent the continuation of a long-term potash capacity expansion program that includes completed work at Rocanville (2005), Allan and Esterhazy (2007), and Lanigan (2008), as well as in-progress construction projects scheduled for completion at Patience Lake (2008), Cory (2010), New Brunswick (2011), and Rocanville, Allan, and Cory (2012). The financing for all projects is expected to be from free cash flow.
“It is clear that global potash demand is continuing to grow more quickly than increases in supply,” said PotashCorp President and CEO Bill Doyle. “With our unmatched potash assets, we can provide a solution that is faster and more cost-effective than greenfield production. Since 2003 we’ve been investing in projects to raise previously idled capacity and then expand capacity at each of our mines, and these projects further support our long-term growth strategy. Our objective is to bring our valuable resources on stream to better serve our customers and meet global demand while delivering increasingly strong results for our shareholders.”